UK Treasury Fights Back On Fleeing Betting Tax Revenue
The
UK Treasury (Finance Ministry) last week confirmed that it
would try to extend its existing CFC (Controlled Foreign Corporation)
in order to tax the profits being made in offshore jurisdictions
by bookmakers who have expatriated their UK betting operations
in order to avoid betting duty. Currently the rules catch overseas
subsidiaries of British companies that pay tax on retained profits
that is more than 75% below the UK rate of corporation tax, and
require the missing tax to be paid in the UK. Companies sometimes use the 'designer'
tax regimes in offshore centres to pay just more than the
minimum permitted level, but the Treasury announced two weeks
ago that it is closing this loophole also. Gibraltar and the Isle
of Man, where much of the exported betting has ended up, both
have such regimes. The Treasury said that it has asked the Gibraltar
authorities to examine the companies concerned very carefully,
because 'the UK taxpayer is losing out'. Well, yes, and no. Meanwhile, in the UK, remaining
bookmakers offered a near-10% increase on the money they pay
to the British Horseracing Levy Board, which has rejected the
offer. The bookmakers say that they cannot afford more unless
the Government reduces betting taxes. They say they are seriously
threatened by offshore and Internet betting and gambling. The
Home Secretary will have to resolve the impasse. .
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